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AMD Expects Windows Tablets to Grab 20% of Market

-- AMD CEO expects Windows-based tablets to grab a 20% share of the global tablet market, rising sharply from current 2%-3% -- CEO Rory Read says AMD processors will also focus on thin, lightweight laptops at more affordable prices -- He says AMD has no plans to enter the market for smartphone chips TAIPEI--The chief executive of computer processor maker Advanced Micro Devices Inc. (AMD) said Wednesday the company expects tablet computers that run on Microsoft Corp.'s (MSFT) Windows operating system will in five years grab a 20% share of the global tablet market so far dominated by Apple Inc.'s (AAPL) iPad. AMD CEO Rory Read said in an interview that Microsoft's next-generation Windows 8 operating system, which is expected to become available this fall, will help Windows-based tablets become more appealing to consumers. Windows tablets currently account for only 2% to 3% of the global market, he added. Mr. Read's comments come as traditional personal computer industry players, such as PC hardware makers and chip makers, are looking to gain more presence in the tablet market with the help from Windows 8, which has an interface optimized for touch-screen use. Taiwan-based PC makers Acer Inc. (2353.TW) and Asustek Computer Inc. (2357.TW) this week unveiled new tablets that run on a preview version of Windows 8, and plan to launch the devices in the fourth quarter. The market for tablets, one of the fastest growing segments of consumer electronics, has so far been dominated by the iPad, while other tablets that run on Google Inc.'s (GOOG) Android operating system have been trying to increase their market share. Research firm IHS iSuppli forecasts worldwide tablet sales to surge 85% to 126.6 million units this year, and expects Apple to hold 61% of the market, about the same as last year. IHS projects Android-based tablets' share at 38%. As part of the PC industry's efforts to create a more lucrative market segment, PC processor chip maker Intel Corp. (INTC), AMD's major rival, has been promoting a new breed of thin, lightweight laptop PCs it calls Ultrabooks. Intel provides the key processors for Ultrabooks. Still, despite Intel's commitment, the sales of Ultrabooks have so far been sluggish, with analysts citing their high prices. Mr. Read said AMD also aims to grow in the still-nascent market for ultra-thin, lightweight notebook PCs. He said that PC makers are rolling out more new models using AMD's low-power processor Trinity, which combines processing units for both computing and graphics. "Some of our competitors have targeted too high in the premium segment," he said. "AMD wants to bring ultra thin notebooks to everyone at a mainstream price point." Mr. Read also added the company sees more potential growth in the consumer PC market than in the corporate market, expecting strong demand from first-time computer users in emerging markets such as China, India, Brazil and Russia. He also said that AMD, which makes processor chips mainly for personal computers and servers, has no plans to enter the market for smartphone chips, as the market is overcrowded and margins are low. Mr. Read said that AMD is trying to strengthen its cloud computing capabilities, and is looking for possible acquisitions in that field. Earlier this year, AMD bought cloud server technology company SeaMicro Inc. for about $334 million. Write to Lorraine Luk at lorraine.luk@dowjones.com (Juro Osawa in Hong Kong contributed to this article.)